Samsung's Micro LED bet will define its future in TVs

Samsung Electronics is going its own way with Micro LED in TVs, leaving behind OLED. The move will be a true test of the legitimacy of its number one position, and could pay off handsomely if it succeeds.

If the unveiling was translated into a Trump tweet, it might have said: "Wow. Did everybody see that beautiful, shiny Micro LED TV by Samsung? So huge. So true. OLED is old news. Losers!"

There was a Trump-esque whiff of Samsung flexing its muscles at the unveiling, to be sure. CES is where tech companies show off their best and the brightest, but most of them are prototypes; some of them you never hear about again. And unlike OLED TVs, which LG and other rivals are pushing hard, Micro LED isn't commercialized. But Samsung says it will definitely go on sale, likely this year.

If it does, Micro LED may turn out to be Samsung's Visual Display (VD) business' biggest coup in over a decade. But it's about more than just money. At its core, the strategy to go Micro LED before anyone else is a standard business 101 strategy: be the creator of the market, dominate market share, and reap all the profits. But it will also show whether the company is truly a "leader" in TVs.

Unlike its other businesses, Samsung's position as number one in TVs has never been cemented, that is accepted by its rivals, the media, and public, and this frustrates the VD business no end. In memory chips, the company has been number one for over 20 years with a market share hovering around 50 percent. In smartphones, it's the biggest seller of Android phones, despite China eating away at its market share. And although having been number one in TVs for 13 years, a market share of around mid-20 percent translates as Samsung having to square up to more challengers than it does in chips and phones.

The launch of quantum dot (QD) LCD TVs in 2015 was in, a lot of ways, its first true test as a leader. It was Samsung trying out its leadership heft. It was renamed QLED in 2017, but the negative comparison to OLED persisted.

The firm has now built a wall around itself against rivals; it's Micro LED against the others. Micro LED is much more difficult to commercialise than QD LCD TVs. The former is a fundamental shift, while the latter expands on legacy technology, know-how, and equipment. It will take time.

But it's a long game that Samsung has played before. A rough example of the company's "my way" strategy succeeding is AMOLED (active matrix organic light-emitting diode) displays on smartphones. When it was introduced 10 years ago, consumers were so unfamiliar with what AMOLED was that Samsung made a music video with a K-Pop girl group for promotions. Earlier iterations in smartphones were ridiculed for being too bright, and other vendors mostly went with LCD.

A decade later, LG switched from LCD to OLED displays for its G6 phone last year. Apple is buying them from Samsung and has applied them to the iPhone X. Chinese vendors buy huge quantities of AMOLED from the South Korean tech giant for their flagships. None of them like buying from Samsung but they have no other vendor that offers them at scale.

So how does Micro LED actually fare against OLED? Both emit light on their own without a backlight, the core feature of both technologies. Both have, pretty much, a contrast ratio of 10,000 to 1. Power consumption wise, both are better than LCD. Both are equal in perfect black. Resolution wise, Micro LED pixels per inch is superior, because one LED is made at a micrometre pixel-level. Micro LED doesn't have any colour filters, while the current OLED uses a white color filter -- hence Samsung's calling out LG's OLED as "not true OLED".

The two biggest advantages Micro LED will have over OLED will be lifespan and customization. OLED's big drawback has been the burn-ins. Because OLED uses organic material, the pixels die out faster; Micro LED on the other hand will use inorganic material that lasts longer. Micro LED will also make it easier for Samsung to make them bigger or smaller. OLED, meanwhile, is made from a set substrate size that can't be altered.

Samsung's persistence will be key as OLED is already well-established. From flexible to lighting, LG has positioned itself well as an innovator, despite being number two in market share. If Samsung backtracks now, it will be an admission of loss. The stakes are higher than when it launched LED TVs or QLED TV, because this is about the next-generation of TV picture technology.

Samsung does have another advantage: the convergence trend. Convergence is a word that has for a while been thrown around by attendees of CES, but indicators seem to point to one big difference this time, in the form of artificial intelligence (AI). And Samsung, being the word's largest electronics maker by revenue, has a portfolio in electronics -- phones, chips, displays, home appliances, and since last year, Harman -- that rivals can only dream of.

Samsung has dubbed its convergence strategy, without irony, One Samsung. Basically it comes down to linking its different products together. There are a lot of iterations of this -- Bixby, SmartThings, and Family Hub. The company showed off an 8K QLED TV that converts low resolution video into 8K, a teaser of sorts. The company is also planning to launch its first AI speaker this year.

Using Micro LED's modular capabilities and leveraging its other portfolios, Samsung will have ample room for innovation. If executed well, the company can finally prove itself an innovator, not a follower, in TVs and beyond.

From QLED, to smart, to curved, Samsung Electronics' experiments in TVs have drawn both praise and ridicule. But are these all leading to a paradigm shift with the South Korean tech behemoth leading the charge?

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